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ECONOMY

Salvini dismisses Italy’s ratings downgrade, says outlook ‘stable’

Interior Minister Matteo Salvini on Saturday dismissed ratings agency Moody's decision to downgrade Italy's credit standing because of the government's controversial budget plans and said the country's outlook was "stable."

Salvini dismisses Italy's ratings downgrade, says outlook 'stable'
Matteo Salvini earlier this month at the headquarters of the General Union of Labor trade union in Rome. Photo: Tiziana Fabi / AFP
The current administration will “keep going for five years, despite the “ratings agencies and European Commissioners,” Salvini told reporters.
 
“We are here to solve the problems of the Italians, not bring down the government or let ourselves be intimidated by the ratings agencies, which have made glaring mistakes in the past — and which are wrong again this time,” he said.
 
“Italy is a solid country, its outlook is stable, the experts tell me that is what counts,” Salvini added.
 
On Friday, Moody's cut Italy's credit rating by a notch from “Baa2” to “Baa3”. It cited concerns about Italy's plans for larger deficits and the high public debt load as the country's populist government clashes with Brussels over its budget.
 
Late Thursday, the European Commission formally warned Italy that its budget 2019 plans were a serious concern, calling for “clarifications” by Monday noon.
 
 
The coalition government of Salvini's far-right League party and the Five Star movement (M5S) was to meet Saturday to discuss its budget. At the heart of the concerns is Italy's public debt, which amounts to 2.3 trillion euros, or 131 percent of Gross Domestic Product (GDP). That is the highest rate in the eurozone after Greece.
 
Brussels has demanded Italy cut spending and reduce its public deficit in order to pare down its debt pile. 

ECONOMY

Sweden’s new right-wing govt slashes development aid

Sweden, one of the world's biggest international donors, is planning drastic aid cuts in the coming years, the country's new right-wing government said in its budget bill presented on Tuesday.

Sweden's new right-wing govt slashes development aid

Prime Minister Ulf Kristersson’s government said it planned to reduce the country’s international aid by 7.3 billion kronor ($673 million) in 2023, and by another 2.2 billion kronor in 2024.

That is around a 15-percent reduction from what had been planned by the previous left-wing government and means Sweden will abandon its foreign aid target of 1 percent of gross national income.

International aid for refugees will be capped at a maximum of eight percent of its aid, and will also be reduced.

According to the specialised site Donor Tracker, Sweden was the world’s eighth-biggest international aid donor in terms of absolute value last year, and the third-biggest in proportion to the size of its economy, donating 0.92 percent of its gross national income, behind Luxembourg and Norway.

The new government, which is backed for the first time by the anti-immigration Sweden Democrats, had announced in its government programme last month that it would be cutting foreign aid.

Since 1975, Stockholm has gone further than the UN’s recommendation of donating at least 0.7 percent of its wealth to development aid.

Despite its growth forecast being revised downwards — the economy is expected to shrink by 0.4 percent next year and grow by 2 percent in 2024 — the 2023 budget forecasts a surplus of 0.7 percent of gross domestic product.

It calls for an additional 40 billion kronor in spending, with rising envelopes for crime fighting and the building of new nuclear reactors, as well as a reduction in taxes on petrol and an increase in the defence budget.

The new government is a minority coalition made up of Kristersson’s conservative Moderates, the Christian Democrats and the Liberal party, backed in parliament by their key ally the Sweden Democrats to give them a majority.

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